Global Strategy, Development, and Implementation: Tesco's Report

This report provides a comprehensive analysis of Tesco's international expansion strategy, focusing on its potential entry into the German market. It begins with the rationale for international expansion, highlighting the benefits of capturing new markets and increasing profitability. The report then explores the strategic choices available to Tesco, including the Ghoshal and Bartlett framework, and suggests a multi-domestic strategy. The choice of Germany as a target market is justified using the PESL and PESTLE models, assessing the political, economic, social, legal, and environmental factors. Different strategic methods of market entry, such as exporting, licensing, and foreign direct investment, are discussed along with their potential consequences. The report also identifies potential organizational and managerial problems that Tesco might encounter in the new international environment, offering strategic advice to overcome these challenges. Overall, the report offers a strategic overview of Tesco's global expansion plans and the challenges associated with them.

GLOBAL STRATEGY,
DEVELOPMENT AND
IMPLEMENTATION
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1) Reasoner for International expansion of the brand..................................................................3
2) Strategies and choices available to parent company...............................................................4
3) Choice of location for the organization...................................................................................5
4) Strategic methods of entry and the possible consequences.....................................................6
5) The potential organizational and managerial problems for the subsidiary operating in the
new international environment....................................................................................................7
6) You should provide strategic advice for the subsidiary to overcome the problems
highlighted in v............................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
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INTRODUCTION
Globalization strategy refer to the process of developing the strategies including process of
expansion in market and it is important for the organization to increases to new countries so that
they can provide the product and services in those country and earn profit (Collinson, Narula and
Rugman, (2017)). It is crucial for them to work with the strategies when expanding the business.
Tesco work in the retail sector and one of the leading brand in the retail market of the UK
(Zakarija-Grković and et.al., 2020). They are leading the market share of the UK retail market
and are top brand in the working. The report Will explain the reasons of Tesco for international
expansion and there possible strategies choices available for them. Further the report will explain
the choices or regions the company want to expand. The potentials of the organization and the
managerial issues the organization can operate in the new international environment.
MAIN BODY
1) Reasoner for International expansion of the brand.
TESCO : Tesco is one of the leading brand in the UK and are providing the facilities including
the supermarket and retail sector. They are the leading brand in UK retail market and are
providing the best services in the country and working across the globe. They are developing the
strategies and expanding the business in different location to capture new market and is helping
them in reaching better results in profitability and productivity.
The historic performance of the Tesco is that they are working since 1919 in London
and are providing the services from such a long period. It is essential for them to increase the
business expansion, and they are developing the business work to create more market share and
increase the benefit & profit in market. The company worked from London and started its
expansion plan which reached to 10 plus countries and the result the organization gets from the
market is very good.
The product and services which the organization is having in the market are very wide
range. They are working in all the product and services of the retail industry and are providing
the quality product to audience (Solberg, 2017). They're having the market share of 27% in the
UK retail market and are leading the market of retail sector in UK. They are having a lot of
competition in market, and they are leading the market by its services they are giving to there
customers.
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TESCO is planning to promote the product and services of the company to provide in
new country. They are planing to develop and expanding the business in Germany. The
organization is increasing its growth and capture of market in the ASIA continent and Europeun
continent, and they are focusing in development of increased working in the process of
expanding to new country in Europe or Asia. They are planning to expand the business in
Germany, and they are developing the strategies of providing their own product in the market as
they are working in the low pricing strategies product and it could provide them a good result in
the market of Germany (Arteag, and Arteaga, 2017).
Since, TESCO is on working on the principle of serving more and more customers with
better products so it would only be possible if it would internationalize its business. An
expansion of business by TESCO would enable it to have widening its scope of business
operation. This will allow the company to serve more customer in different countries. Expansion
will also enable the TESCO to broaden up its business along with grabbing future opportunities
and becoming a competitive player for other.
2) Strategies and choices available to parent company
Strategic choices of the business in the process of working in retail industry. It is important for
the organization to develop the strategies which can help them in dealing with the situation they
can feel in the new market. They need to develop planning and organized structure to work in. it
will also enable the process of working in the industry and increase the overall performance. It is
important for the organization to make sure that they are following the strategies which can help
them in increasing business in new country (Gupta and et.al., 2019). Here are the strategic
choices available to Tesco which are explained with the context of this framework : -
Ghoshal and Barlett framework:
As per this model there are four main strategies that lead to expansion of the business.
Global strategy:
This strategy is concerned with global expansion of the business. This means under this
concept the strategies related with global expansion is made by the companies (Hill and Hult,
(2018)). These strategies will help the company to expand its business.
Transnational strategy:
This strategy is generally followed by those companies which already operate their
business. This means that the companies that deal in variety of product and operate in
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different countries. Under this strategy they mould their product as per the culture or the local
environment of the country and raise their sales.
Multi-domestic strategy:
As per this strategy the companies will make their products domestic as per the culture of
the country. This means that the country in which they operate their business they will
transform their product as per the local culture.
International strategy:
As per this strategy the companies make expansion of their business if the cost pressure
and local responsiveness is low. This means that if the companies don’t get support if local
market then they work with international strategy and make expansion of business.
In case of TESCO it usually works its expansion with the consideration of multi-domestic
strategy. This is because this strategy will not only allow it to expand its business but it will also
lead the company to raise its sales and grabbing more customers.
3) Choice of location for the organization
Germany is the choice of market where the organization is planning and want to work. It
is because the market of the Germany is very wide and it can be a huge benefit to the
organization. There are several other brand and competition in the German market which can be
a negative point for the organization. But the organization is having a huge market share in UK
and are having a great goodwill in international market to which people choose the organization.
It can help them in development of better product and services. They can earn more of the
income and sales in the new market (Koziej, 2017). The establishment of other brands working
in the retail sector in German market, and they are getting huge benefit in the market. This can be
a possible benefit which the Tesco can see and work on the expansion project of the brand in
German market.
In addition of this, in order to locate the country for expansion an application of PESL model
would help the TESCO for better decision making.
PESL model:
Political:
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It includes political environment of the country. Since the political environment of the
Germany in terms of its relation with various countries including France, US and EU are good so
it would be right to said that the TESCO can move into this country because of availability of
wider opportunities.
Economic:
As Germany is counted under the largest economies of the world so the economic
situation of the country is far better than any other country. Also the economic policies including
employment rate, tax policies and various other policies of the country is flexible so choosing of
this country for expansion is a right decision.
Social:
As Germany is counted under the best country of the world in terms of inculcation of
wealth, education and quality life. Also the social culture of the country is supportive.
Legal:
As Germany follows the concept of law where it don’t make differentiation between
German law and the foreign law in terms of establishment of company and making investment. It
is also a promoter of all the type of business (Rahman, 2020).
PESTLE analysis:
Political:
As the political situation of the country with respect to laws and policies with a
maintenance of good relation with big countries will enable better opportunities to TESCO if it
chose Germany for making expansion of its business.
Economic:
As the laws of the Germany with reward to economic environment are flexible. So this
would also allow enough opportunities to TESCO with respect to getting advantage of the
economic environment along with exploration of business.
Social:
Since the social culture of the people of Germany is supportive so it would be counted as
a right decision for TESCO to expand its business operation. This will also enable an opportunity
to grab more customers.
Technological:
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Since Germany is counted among those countries that possess high technological
advancement so it would make the TESCO to be technologically equipped. However, it would
also act as a threat for the company because it involves high investment cost.
Legal:
As the legal structure of the Germany is supportive to business so TESCO would not find
any difficulty in the establishment of its business. This would act as an opportunity for TESCO
with regard to legal compliance.
Environmental:
The environmental condition of the Germany in respect to its history and natural resources
are also highly attractive which brings many tourist towards the country. Thus, it will also enable
the company to have global presence if it chooses Germany for expansion of its business.
4) Strategic methods of entry and the possible consequences
There are different modes of the entry which Tesco can use in development of market in new
place. Here are some ways in which the country can develop strategy to enter new market : -
Exporting : — Exporting is one of the method to get into new market. It involves ways to
develop a market where the organization want to develop there business. It is one of the method
which can provide the entry in foreign market to the business at a very low risk. It is mostly used
by the firms to develop new market entry and also increase the process of increasing business.
The majority of the cost which incurred in the exporting are the marketing expense.
Possible consequences : -
It helps in increasing business and stop relying the business on single particular thing.
There are geographical and transportation issues while doing the exporting in the business the
company can face. The legal norms of the country can be a huge factor while doing the exporting
of the brand in the German market.
Licensing : - Licensing is the process of developing the business in market, it required the
process of increasing the market and entry in the new market. In licensing the company choose
the company form the choose location and provide them with the license of working with the
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brand name. In this the licence can be provided to any individual or the company who can afford
the prices of the licence of Tesco.
Possible consequences : -
The consequences of the licensing are that it will make the loose in the control of your
product and including the promotion, packaging, selling of product. Licensing only provide the
portion of the profit from product sale by the company who is outlines with your agreement. But
on the other hand you need not be providing any production and promoting cost.
Foreign direct Investment : - it is the process of directly involving in the foreign market where
the organization want to expand there business or want to increase working. It requires a lot of
(capita) and Tesco is having a lot of money and no issues of the financial capabilities to do the
foreign direct invest.
Possible consequences : -
The possible consequences are the exchange crisis which the organization can face and it can
also face the political corruption in the workplace which can lead to loss in business and can also
make the business to suffer with different factors. It can help in the increase of fund or capital
flow if the business gets into the political factors and suits as to get better profit margin.
From the above methods of entry, TESCO can adopt the method of licensing and foreign
direct investment. This is because as licensing will enable the easy expansion of the company.
Likewise, with the presence of strong financial background it can easily make FDI and make its
expansion. Also both these methods would lead to have expansion of business without having a
compliance of high legal formalities.
5) The potential organizational and managerial problems for the subsidiary operating in the new
international environment
Cultural Factor : — Culture factor include the change of taste and preferences a person have in
there country. There are different working and ways of living in different places and the
organization need to develop a process where they need to create a better process of providing
the data and product according to the preferences of the people in that country. Thus, it is
counted as operational issue because it has to make changes in operational activities as per the
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demand of culture. This will help in increase of profitability and productivity (Rositch and et.al.,
2020).
Political Factors : - Political factor include the policies of the country where the organization
want to work and it is important for them to develop a process so that they can work in all the
political policies the government is asking for. This is one of the major factor that lead to create
managerial issue because they have to remould the company’s policies accordingly otherwise it
would cause them the problem. Thus, it is essential for the Tesco to create a working style to
manage the work in the business (World Health Organization, 2017).
Language barriers : - Language barrier refer to the barrier the business is facing due to the
language change in the country they are working or want to work. They need to hire the people
from those country and also need to develop a procedure of training the language process so that
every person van get the idea about the language and able to work. The local hiring are the best
ways to develop business (Fedato, Pires and Trez, 2017). Company need to follow the guidelines
of the German laws to work in the German market and it is essential for them to develop the
process of increased working in business. There area lot issues they can face if they do not
follow the process of legal laws and legislation. Thus, it will lead to create issues for the
managerial as well as operation department because both have to inculcate this factor during the
operation of their concerned roles.
Legal factors : - legal barriers refer to the process of issues the company face due to the legal
factor of the country they are planning to expand the business. The change of policies and legal
requirement can cause issue to managerial department of the business in terms of affecting there
profitability and also in there production. This is mandatory for them to develop a process where
they need to increase the working of the legal criteria and need to match to increase the
profitability.
Social factor : - social factors and the social issues are the issue which the company can face due
to the issues of the business preferences of the audience in market. It is essential for them to
develop a process where they can increase the working of the business and also to raise the
process of development. The company need to make plans and need to develop strategy to make
the product range and variety according to the market preferences and taste of the place they are
expanding then business (Shrivastava, Shrivastava and Ramasamy, 2017). Non-compliance of
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this factor would create major issue for operation department because it will have a direct impact
over the company’s business operation.
6) You should provide strategic advice for the subsidiary to overcome the problems highlighted
in v.
Training : - To overcome the issues or the problem the subsidiaries are facing they need to
develop a process of increasing the knowledge and skills to get the possible result the company is
looking for. It is essential for the managerial and operation department to develop training and
development so that they can provide a better process at the organization and create a wide
working in the management. Training help in developing strategy and resolve the issues a person
is facing due to lack of skills and knowledge (Jin, Meng and Berger, 2017). Tesco provide the
best of training and development to increase the process of developing into there employee
capabilities and ability to increase the working.
Strong research culture : - Strong research about the culture of the country the company is
working in. it is essential for the company to make sure that they are developing the research
about the issues they are facing due to the culture in their workplace. It is essentials for them to
make sure that they are doing enough of the research to develop a process in increased
performance. It is crucial for them to develop a market research and the product and structure of
the organization should not harm any culture in the workplace. Thus, performance and designing
the process of research by operational department would lead to resolve the issue of the
company. It can impact in the overall process of working and also develop a process where they
can lose the contact of audience if they are not following the culture of the country. There should
not be any conflict at the workplace to the cultural issues, the manager need to develop a process
to increase the working and provide the people with all the support they are demanding for there
growth (Lo, and et.al, 2017).
Hire local people : - Here taking of decision by the managerial department in terms of hire
people form the local support so that they can get a good control in the language barriers or the
working style of the country. It is essential for the business to make sure they manage with the
country way of working and the hiring of local people can provide them support to the
development in working. There are issues of the legal and political factors and for that the best
strategy is to assign a local authority who can guide the organization in development and
necessary requirement to be filled. This will develop a process of faster working and increase in
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develop process of workplace. This will provide the Tesco in increased working with all the
guidelines followed by the process of increased performance. The hiring need to be done on the
local recruitment so that the process of language barrier can be eliminated and the training and
educating people in the workplace for the culture and language can help them achieve the
business goals.
CONCLUSION
From the above report it can be concluded that the organization need to provide a better process
of develop working so that they can develop progress in there expansion. The increase in the
research and development in the business so that they can provide a better impact on the overall
business plan they are making. The report further conclude that there are issues or problem the
company can face in the new market need to develop a new entry process to increase business. It
is essential for them to develop a process so that they can provide a better working in the
business and increase the overall process of development in the business profitability and
productivity.
REFERENCES
Books and journals
Arteaga, F. and Arteaga, F., 2017. European defence between the Global Strategy and its
implementation. Real Institut Elcano.
Collinson, S., Narula, R., and Rugman, A. M. (2017) International Business, 7th ed., Harlow,
UK: Pearson Education Limited
Fedato, G.A.D.L., Pires, V.M. and Trez, G., 2017. The future of research in strategy
implementation in the BRICS context. BBR. Brazilian Business Review, 14(3),
pp.288-303.
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Gupta and et.al., 2019. The world breastfeeding trends initiative: implementation of the global
strategy for infant and young child feeding in 84 countries. Journal of public
health policy, 40(1), pp.35-65.
Hill, C. W. L., and Hult, G. T. M (2018) Global Business Today, 10th ed. New York: McGraw-
Hill Education
Jin, Y., Meng, J. and Berger, B., 2017. The influence of communication leadership qualities on
effective crisis preparedness strategy implementation: Insights from a global
study. Communication Management Review, 2(01), pp.8-29.
Koziej, S., 2017. EU global strategy: opportunities and challenges of further
implementation. Pulaski Policy Papers”, Warsaw.
Lo, and et.al, 2017. A call to strengthen the global strategy against schistosomiasis and soil-
transmitted helminthiasis: the time is now. The Lancet infectious
diseases, 17(2), pp.e64-e69.
Rositch and et.al., 2020. The role of dissemination and implementation science in global breast
cancer control programs: frameworks, methods, and examples. Cancer, 126,
pp.2394-2404.
Shrivastava, S.R., Shrivastava, P.S. and Ramasamy, J., 2017. Strategic implementation of the
global strategy for the containment of the infective viral hepatitis. Journal of
Current Research in Scientific Medicine, 3(1), p.64.
Solberg, C.A., 2017. International Marketing: Strategy development and implementation.
Routledge.
World Health Organization, 2017. Global strategy and action plan on ageing and health.
Zakarija-Grković and et.al., 2020. Are our babies off to a healthy start? The state of
implementation of the Global strategy for infant and young child feeding in
Europe. International Breastfeeding Journal, 15, pp.1-12.
Online references
Rahman, M., 2020. PESTLE analysis of Germany. [Online]. Available through
<https://howandwhat.net/pestel-analysis-germany/#:~:text=This%20PESTEL
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